Time Warner CFO: 9 Million UltraViolet Accounts Registered

Consumers have registered millions of movies and TV shows to the UltraViolet digital locker by end of 2012, Time Warner CFO John Martin told an investor group.

Speaking Jan. 7 at the 2013 Citi Global Internet, Media & Telecommunications Conference in Las Vegas, Martin said the industry-backed consortium (with the exception of Disney) promoting sellthrough of packaged media and digital content with the placement of a digital file in a cloud-based storage system is gaining momentum.

“The numbers I saw at year-end [indicate] there are roughly 9 million accounts registered for UltraViolet,” Martin said, adding that many of the accounts have originated through Flixster.com, which Warner acquired more than a year ago.

“Forget about stabilizing [home entertainment]. We would like to grow the category,” Martin said.

To do that, the CFO said the focus going forward has to be on higher-margin categories at the expense of lower-margin channels. Doing that, Martin said, mandates drive home to consumers the value proposition of owning content.

“The value proposition has to be more compelling,” he said.

Martin said there are about 8,500 movies and TV shows now available on UltraViolet. He said UV drivers include upping consumer awareness and availability of titles, with increased marketing.

Separately, the CFO said there would be greater efforts to market UltraViolet internationally, where he said the concept has been largely constrained.

“We’re quite pleased with the progress that has happened with UltraViolet,” he said. “And I think 2013 is going to be a really important year. If that can happen, there’s a lot of optimism the [home entertainment] category can grow.”

Meanwhile, Warner Bros. Home Entertainment Group again topped all studios in 2013 despite a box office tally that ranked second to Walt Disney Studios.

Martin said home entertainment revenue for the year was relatively flat due in large part to digital content. He said the subscription video-on-demand category is a big part of digital’s impact on home entertainment. In general, he said digital revenue is hitting a level of scale that is becoming significant enough to stem the physical sales decline.

Indeed, Warner’s SVOD revenue topped $350 million in 2012, with $100 million generated in the fourth quarter, according to Martin. He said home entertainment’s fortunes in 2013 remain largely dependent on consumer response to box office titles.